"The system of making the pay of officers (of the upper grade) dependent on the success of the business, has worked well, and might be advantageously continued, in a modified form, to be hereafter noticed.

"The duties of the officers of the proposed reduced staff would be adapted to the existing distribution of the territory into departments and districts, which are as follows:—

"There are four main divisions—the Northern, Southern, Western, and Montreal Departments, roughly bounded as follows:—the 'Western' embraces all the country west of the Rocky Mountains; the 'Northern' is composed of the country east of the mountains, as far as Lake Winnipeg and Lac la Pluie, and from the American frontier to the Arctic Sea; the 'Southern' embraces the southern and eastern shores of Hudson's Bay; and the 'Montreal' extends from Lake Superior down the Gulf of St. Lawrence to Labrador. These departments are divided into districts, and in each district are several posts. The limits of districts are fixed by local peculiarities; but commonly embrace some large river, on which the various stations are planted—such, for example, as the McKenzie and the Saskatchewan. There are twenty-three districts on the east side of the mountains; to the west such subdivision of the business is now scarcely practicable, and is being abandoned. To proceed to the duties of the officers.

"The Governor-in-Chief would fulfil his present large functions, and be the medium of communication between the Company and their officers in the country.

"Under the present system the Governor is supposed to maintain a personal supervision of the whole service. This is practically impossible, the country being too large to enable him to travel over more than a limited section of it in each season. To relieve him of that heavy duty, and at the same time to maintain a real and close personal inspection, one of the four councillors might be stationed in each department, of which, in the absence of the Governor, he would be the chief officer, and held responsible for all local details, and the various posts in which he should periodically inspect and report upon. Once, or oftener, in each year, a meeting of the Governor and the four councillors should be held, at any time or place most convenient—say, Fort Garry, Montreal, or elsewhere. Aided by such a council, the Governor would be accurately informed as to details in every part of the country, and able to deal satisfactorily with all local questions.

"The duty of the Lieutenant-Governor would be to relieve the Governor- in-Chief of some share of his labours, and to act in his absence as President of Council.

"The chief traders would, as a general rule, be placed at the head of districts, and the clerks in charge of posts.

"The very efficient class of officers known as 'postmasters' would remain as at present. They are usually men who have risen from the ranks from merit; and, being good interpreters, and Indian traders, are commonly placed in charge of small posts. Their scale of pay is rather less than that of clerks, and they are rarely advanced to any higher rank; indeed, their ambition is satisfied when they are made postmasters.

"Reverting to the mode of paying officers, and making their incomes to some extent dependent on the success of the business, it might answer to give them an interest as stockholders. Instead of paying a chief trader 300_l_. per annum, he might have 250_l_., and a sum of 1,000_l_. of stock placed to his credit, of which he would receive the dividends only, the stock itself reverting to the Company when his connection with them terminated.

"A councillor might have 700_l_. pay and the dividends on 2,000_l_. stock. It would also be a great encouragement to the officers, and secure prolonged service, to give them an annual increase of stock—say, 200_l_. to be added for every year's service. Thus, if a man did not get as early promotion as he expected, he would still benefit by length of service.